Add a note by highlighting text or Replying to an existing note.
Add a note by highlighting text or Replying to an existing note.
Three Months Ended June 30, |
Year-over-Year % Change |
||||||||
In millions, except percentages and per share amounts |
2020 |
2019 (1)
|
|||||||
Revenue: |
|||||||||
Advertising |
$ |
18,321 |
$ |
16,624 |
10% |
||||
Other |
366 |
262 |
40% |
||||||
Total revenue |
18,687 |
16,886 |
11% |
||||||
Total costs and expenses |
12,724 |
12,260 |
4% |
||||||
Income from operations |
$ |
5,963 |
$ |
4,626 |
29% |
||||
Operating margin |
32 |
% |
27 |
% |
|||||
Provision for income taxes |
$ |
953 |
$ |
2,216 |
(57)% |
||||
Effective tax rate |
16 |
% |
46 |
% |
|||||
Net income |
$ |
5,178 |
$ |
2,616 |
98% |
||||
Diluted earnings per share (EPS) |
$ |
1.80 |
$ |
0.91 |
98% |
• |
Facebook daily active users (DAUs) – DAUs were 1.79 billion on average for June 2020, an increase of 12% year-over-year.
|
• |
Facebook monthly active users (MAUs) – MAUs were 2.70 billion as of June 30, 2020, an increase of 12% year-over-year.
|
• |
Family daily active people (DAP) – DAP was 2.47 billion on average for June 2020, an increase of 15% year-over-year.
|
• |
Family monthly active people (MAP) – MAP was 3.14 billion as of June 30, 2020, an increase of 14% year-over-year.
|
• |
Capital expenditures – Capital expenditures, including principal payments on finance leases, were $3.36 billion for the second quarter of 2020.
|
• |
Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $58.24 billion as of June 30, 2020. On July 7, 2020, we paid approximately $5.8 billion at the then‑current exchange rate for our investment in Jio Platforms Limited.
|
• |
Headcount – Headcount was 52,534 as of June 30, 2020, an increase of 32% year-over-year.
|
• |
Engagement - Facebook DAUs and MAUs in the second quarter of 2020 reflect increased engagement as people around the world sheltered in place and used our products to connect with the people and organizations they care about. More recently, we are seeing signs of normalization in user growth and engagement as shelter‑in-place measures have eased around the world, particularly in developed markets where Facebook's penetration is higher. Looking forward, as shelter-in-place restrictions continue to ease, we expect the number of Facebook DAUs and MAUs to be flat or slightly down in most regions in the third quarter of 2020 compared to the second quarter of 2020.
|
• |
Revenue - In the first three weeks of July, our year-over-year ad revenue growth rate was approximately in‑line with our second quarter 2020 year-over-year ad revenue growth rate of 10%. We expect our full quarter year-over-year ad revenue growth rate for the third quarter of 2020 will be roughly similar to this July performance. There are several factors contributing to this outlook, including:
|
◦ |
First, continued macroeconomic uncertainty, including the pace of recovery and the prospects for additional economic stimulus; |
◦ |
Second, our expectation that some of the recent surge in community engagement will normalize as regions reopen; |
◦ |
Third, the impact from certain advertisers pausing spend on our platforms related to the current boycott, which is reflected in our July trends; and |
◦ |
Lastly, headwinds related to ad targeting and measurement, including the impact of regulation, such as the California Consumer Privacy Act, as well as headwinds from expected changes to mobile operating platforms, which we anticipate will be increasingly significant as the year progresses. |
• |
Total expenses - We expect total expenses in 2020 to be in the range of $52-55 billion, narrowed slightly from the prior range of $52-56 billion.
|
• |
Capital expenditures - We expect full-year 2020 capital expenditures to be approximately $16 billion, at the high end of our prior $14-16 billion range, as we have resumed data center construction efforts earlier than expected. However, a great deal of uncertainty remains in our outlook, and our full year capital expenditures will depend on how the pandemic impacts our ability to construct data centers and refresh equipment.
|
• |
Tax rates - We expect our full-year 2020 tax rate to be in the mid-teens, although we may see fluctuations in our quarterly rate depending on our financial results.
|
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
(In millions, except for per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2020 |
2019 (1)
|
2020 |
2019 (1)
|
||||||||||||
Revenue |
$ |
18,687 |
$ |
16,886 |
$ |
36,423 |
$ |
31,963 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue |
3,829 |
3,307 |
7,288 |
6,123 |
|||||||||||
Research and development |
4,462 |
3,315 |
8,477 |
6,175 |
|||||||||||
Marketing and sales |
2,840 |
2,414 |
5,627 |
4,434 |
|||||||||||
General and administrative |
1,593 |
3,224 |
3,175 |
7,288 |
|||||||||||
Total costs and expenses |
12,724 |
12,260 |
24,567 |
24,020 |
|||||||||||
Income from operations |
5,963 |
4,626 |
11,856 |
7,943 |
|||||||||||
Interest and other income, net |
168 |
206 |
136 |
371 |
|||||||||||
Income before provision for income taxes |
6,131 |
4,832 |
11,992 |
8,314 |
|||||||||||
Provision for income taxes |
953 |
2,216 |
1,911 |
3,269 |
|||||||||||
Net income |
$ |
5,178 |
$ |
2,616 |
$ |
10,081 |
$ |
5,045 |
|||||||
Earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
$ |
1.82 |
$ |
0.92 |
$ |
3.54 |
$ |
1.77 |
|||||||
Diluted |
$ |
1.80 |
$ |
0.91 |
$ |
3.51 |
$ |
1.76 |
|||||||
Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders: |
|||||||||||||||
Basic |
2,850 |
2,855 |
2,851 |
2,855 |
|||||||||||
Diluted |
2,879 |
2,875 |
2,876 |
2,873 |
|||||||||||
Share-based compensation expense included in costs and expenses: |
|||||||||||||||
Cost of revenue |
$ |
117 |
$ |
109 |
$ |
211 |
$ |
196 |
|||||||
Research and development |
1,261 |
927 |
2,260 |
1,650 |
|||||||||||
Marketing and sales |
187 |
160 |
336 |
273 |
|||||||||||
General and administrative |
130 |
107 |
223 |
194 |
|||||||||||
Total share-based compensation expense |
$ |
1,695 |
$ |
1,303 |
$ |
3,030 |
$ |
2,313 |
FACEBOOK, INC. | |||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In millions) | |||||||||
(Unaudited) | |||||||||
June 30, 2020 |
December 31, 2019 |
||||||||
Assets |
|||||||||
Current assets: |
|||||||||
Cash and cash equivalents |
$ |
21,045 |
$ |
19,079 |
|||||
Marketable securities |
37,195 |
35,776 |
|||||||
Accounts receivable, net of allowances of $365 and $206 as of June 30, 2020 and December 31, 2019, respectively |
7,483 |
9,518 |
|||||||
Prepaid expenses and other current assets |
2,407 |
1,852 |
|||||||
Total current assets |
68,130 |
66,225 |
|||||||
Property and equipment, net |
39,006 |
35,323 |
|||||||
Operating lease right-of-use assets, net |
9,429 |
9,460 |
|||||||
Intangible assets, net |
859 |
894 |
|||||||
Goodwill |
19,029 |
18,715 |
|||||||
Other assets |
3,238 |
2,759 |
|||||||
Total assets |
$ |
139,691 |
$ |
133,376 |
|||||
Liabilities and stockholders' equity |
|||||||||
Current liabilities: |
|||||||||
Accounts payable |
$ |
920 |
$ |
1,363 |
|||||
Partners payable |
729 |
886 |
|||||||
Operating lease liabilities, current |
899 |
800 |
|||||||
Accrued expenses and other current liabilities |
8,496 |
11,735 |
|||||||
Deferred revenue and deposits |
264 |
269 |
|||||||
Total current liabilities |
11,308 |
15,053 |
|||||||
Operating lease liabilities, non-current |
9,633 |
9,524 |
|||||||
Other liabilities |
8,303 |
7,745 |
|||||||
Total liabilities |
29,244 |
32,322 |
|||||||
Commitments and contingencies |
|||||||||
Stockholders' equity: |
|||||||||
Common stock and additional paid-in capital |
47,805 |
45,851 |
|||||||
Accumulated other comprehensive loss |
(142 |
) |
(489 |
) |
|||||
Retained earnings |
62,784 |
55,692 |
|||||||
Total stockholders' equity |
110,447 |
101,054 |
|||||||
Total liabilities and stockholders' equity |
$ |
139,691 |
$ |
133,376 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
Cash flows from operating activities |
|||||||||||||||
Net income |
$ |
5,178 |
$ |
2,616 |
$ |
10,081 |
$ |
5,045 |
|||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||||||||||
Depreciation and amortization |
1,704 |
1,502 |
3,301 |
2,857 |
|||||||||||
Share-based compensation |
1,695 |
1,303 |
3,030 |
2,313 |
|||||||||||
Deferred income taxes |
214 |
1 |
690 |
184 |
|||||||||||
Other |
43 |
9 |
49 |
14 |
|||||||||||
Changes in assets and liabilities: |
|||||||||||||||
Accounts receivable |
(122 |
) |
(1,006 |
) |
1,924 |
64 |
|||||||||
Prepaid expenses and other current assets |
(325 |
) |
(252 |
) |
(353 |
) |
(168 |
) |
|||||||
Other assets |
3 |
24 |
(15 |
) |
65 |
||||||||||
Accounts payable |
(56 |
) |
8 |
(100 |
) |
(87 |
) |
||||||||
Partners payable |
11 |
20 |
(158 |
) |
20 |
||||||||||
Accrued expenses and other current liabilities |
(3,995 |
) |
2,827 |
(3,016 |
) |
5,982 |
|||||||||
Deferred revenue and deposits |
15 |
55 |
(1 |
) |
51 |
||||||||||
Other liabilities |
(487 |
) |
1,508 |
(554 |
) |
1,584 |
|||||||||
Net cash provided by operating activities |
3,878 |
8,615 |
14,878 |
17,924 |
|||||||||||
Cash flows from investing activities |
|||||||||||||||
Purchases of property and equipment, net |
(3,255 |
) |
(3,633 |
) |
(6,813 |
) |
(7,470 |
) |
|||||||
Purchases of marketable securities |
(6,179 |
) |
(5,152 |
) |
(14,063 |
) |
(11,755 |
) |
|||||||
Sales of marketable securities |
2,617 |
2,944 |
5,381 |
4,456 |
|||||||||||
Maturities of marketable securities |
3,224 |
1,895 |
7,868 |
4,105 |
|||||||||||
Acquisitions of businesses, net of cash acquired, and purchases of intangible assets |
(339 |
) |
(3 |
) |
(372 |
) |
(53 |
) |
|||||||
Other investing activities, net |
(245 |
) |
(61 |
) |
(288 |
) |
(61 |
) |
|||||||
Net cash used in investing activities |
(4,177 |
) |
(4,010 |
) |
(8,287 |
) |
(10,778 |
) |
|||||||
Cash flows from financing activities |
|||||||||||||||
Taxes paid related to net share settlement of equity awards |
(753 |
) |
(606 |
) |
(1,444 |
) |
(1,119 |
) |
|||||||
Repurchases of Class A common stock |
(1,369 |
) |
(1,144 |
) |
(2,618 |
) |
(1,758 |
) |
|||||||
Principal payments on finance leases |
(109 |
) |
(142 |
) |
(209 |
) |
(267 |
) |
|||||||
Net change in overdraft in cash pooling entities |
63 |
58 |
(17 |
) |
(119 |
) |
|||||||||
Other financing activities, net |
16 |
4 |
114 |
9 |
|||||||||||
Net cash used in financing activities |
(2,152 |
) |
(1,830 |
) |
(4,174 |
) |
(3,254 |
) |
|||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
93 |
26 |
(127 |
) |
(18 |
) |
|||||||||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
(2,358 |
) |
2,801 |
2,290 |
3,874 |
||||||||||
Cash, cash equivalents, and restricted cash at beginning of the period |
23,927 |
11,197 |
19,279 |
10,124 |
|||||||||||
Cash, cash equivalents, and restricted cash at end of the period |
$ |
21,569 |
$ |
13,998 |
$ |
21,569 |
$ |
13,998 |
|||||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets |
|||||||||||||||
Cash and cash equivalents |
$ |
21,045 |
$ |
13,877 |
$ |
21,045 |
$ |
13,877 |
|||||||
Restricted cash, included in prepaid expenses and other current assets |
308 |
9 |
308 |
9 |
|||||||||||
Restricted cash, included in other assets |
216 |
112 |
216 |
112 |
|||||||||||
Total cash, cash equivalents, and restricted cash |
$ |
21,569 |
$ |
13,998 |
$ |
21,569 |
$ |
13,998 |
FACEBOOK, INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
(In millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
Supplemental cash flow data |
|||||||||||||||
Cash paid for income taxes, net |
$ |
1,041 |
$ |
1,014 |
$ |
1,250 |
$ |
1,696 |
|||||||
Non-cash investing activities: |
|||||||||||||||
Acquisition of businesses and other investments in accrued expenses and other liabilities |
$ |
316 |
$ |
— |
$ |
316 |
$ |
— |
|||||||
Property and equipment in accounts payable and accrued liabilities |
$ |
1,592 |
$ |
1,667 |
$ |
1,592 |
$ |
1,667 |
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(In millions, except percentages) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||
GAAP revenue |
$ |
18,687 |
$ |
16,886 |
$ |
36,423 |
$ |
31,963 |
|||||||
Foreign exchange effect on 2020 revenue using 2019 rates |
297 |
573 |
|||||||||||||
Revenue excluding foreign exchange effect |
$ |
18,984 |
$ |
36,996 |
|||||||||||
GAAP revenue year-over-year change % |
11 |
% |
14 |
% |
|||||||||||
Revenue excluding foreign exchange effect year-over-year change % |
12 |
% |
16 |
% |
|||||||||||
GAAP advertising revenue |
$ |
18,321 |
$ |
16,624 |
$ |
35,760 |
$ |
31,536 |
|||||||
Foreign exchange effect on 2020 advertising revenue using 2019 rates |
295 |
571 |
|||||||||||||
Advertising revenue excluding foreign exchange effect |
$ |
18,616 |
$ |
36,331 |
|||||||||||
GAAP advertising revenue year-over-year change % |
10 |
% |
13 |
% |
|||||||||||
Advertising revenue excluding foreign exchange effect year-over-year change % |
12 |
% |
15 |
% |
|||||||||||
Net cash provided by operating activities |
$ |
3,878 |
$ |
8,615 |
$ |
14,878 |
$ |
17,924 |
|||||||
Purchases of property and equipment, net |
(3,255 |
) |
(3,633 |
) |
(6,813 |
) |
(7,470 |
) |
|||||||
Principal payments on finance leases |
(109 |
) |
(142 |
) |
(209 |
) |
(267 |
) |
|||||||
Free cash flow (1)
|
$ |
514 |
$ |
4,840 |
$ |
7,856 |
$ |
10,187 |